Comments on: 10 Smart Student Credit Rules

By: jillianlou

jillianlou — Tue, 23 Jun 2009 03:02:40 +0000

Get A credit card early – emphasis on the A. Don’t sign up for more than one or two – you don’t need thousands of dollars of available credit!

There are plenty of credit cards with NO annual fee – don’t sign up for one that has one! The rewards are never worth it.

By: Alex

Alex — Thu, 18 Jun 2009 01:07:03 +0000

Thanks for the tips! I’m a college student who’s been avoiding credit cards because I don’t want to develop any bad habits. With them. It’s about time I shrug off those fears.

By: Julio

Julio — Wed, 17 Jun 2009 17:21:46 +0000

I use the statement date as my reminder. Whenever I get the email that my statement is ready, I usually log in and download it and immediately schedule the payment for the day it’s due. That way I’m sure to be on time, every time and not have to worry about my internet access being down on the day my payment was due. With most cards allowing you to schedule payments in advance, I don’t see how you could be late with payments.

By: thomas

thomas — Wed, 17 Jun 2009 04:28:07 +0000

Your first card wasn’t Discover? Man your freshman welcome pack must of sucked!

These rules apply for everyone, not just students.

By: eric

eric — Wed, 17 Jun 2009 03:37:19 +0000

Great, solid advice. I followed this exactly when I started with credit at 18 too and it’s served me well.

I can’t emphasize enough the point you made about not giving students credit cards at all. That’s ludicrous to me and doesn’t solve any problems. Thanks for bringing it up!

By: Vicki@collegeparentcentral

Vicki@collegeparentcentral — Tue, 16 Jun 2009 23:11:55 +0000

This is really great advice. A credit card can be a wonderful tool – for establishing a credit history or for emergencies, but paying it off each month is crucial. With college seniors graduating with an average of more than $4,000 in credit card debt, it’s obvious that using credit cards wisely is important.

It’s important for students to learn how to use credit responsibly, and they won’t learn that if they don’t have the opportunity to practice.

By: Frugal Finances

Frugal Finances — Tue, 16 Jun 2009 14:51:41 +0000

#11. Put your credit card on autopilot. A student credit card is ONLY used to establish good credit. Ignore how your friends use their credit cards (“Dude! I rack up some many points and get all this free stuff!”). A credit card is ONLY used to establish good credit.

It’s a steep learning curve (and you’ve got other stuff to study), don’t waste your time getting burned by it when you’ve gone all this time without a credit card. Cash is king.

1. Take your time choosing a good credit card (no annual fees being the most important factor) from a good bank (not a retailer) as you will have to keep your first card for a long time to establish a good history (when you switch, you lose out).
2. Set up auto-billing to your credit card with your fixed monthly utilities.
3. Set up a separate chequing account for your fixed expenses like rent and utilities (hopefully you’ve already set up a 2-3 month buffer for your fixed expenses like rent and utilities)
4. Send a debit preauthorization form from your chequing account bank to the payment processing center of your credit card. The full balance will automatically be paid off every month.
5. Store your credit card in your filing cabinet and forget about it; it’s on autopilot.

Other tips: Credit card scores grow the fastest when the credit use is a fraction of the total credit limit (10% is great). Call your credit card company every 6 months and ask for an interest rate reduction. You don’t use it or need it, which is why they’ll give it to you. By the time you graduate, you’ll have gone from their ridiculous interest rate down to something reasonable/comforting if you every run into a medical emergency in your family and need to carry a balance. Pick one. Be loyal. Reap the benefits of a long term relationship.

By: Caitlin

Caitlin — Tue, 16 Jun 2009 14:18:25 +0000

I’m pro-credit card, and even I agree with WMM’s comment. Paying off your credit card every month is one of the basic rules, just like how driving on the proper side of the road is one of the basic rules for driving a car. If you can’t follow the simple rules, take a step back and maybe try again later when you have a bit more self control. If you don’t learn to do it right, you put yourself at great risk in the future.

By: My Journey

My Journey — Tue, 16 Jun 2009 13:55:46 +0000

Only one I can think about adding is:

Do not use your card and then take cash from someone thinking you are going to use it pay off your card!

By: Wise Money Matters

Wise Money Matters — Tue, 16 Jun 2009 13:55:39 +0000

Personally, I’m still anti-credit card. I built up my credit by purchasing a used car.

I would put an addendum to #3. If you can’t pay the entire balance any month, cut up the credit card. You don’t have the discipline to keep your credit card under control and shouldn’t have one.

I know that’s a little harsh but I think it’s important to not allow yourself to fall into allowing the credit card to have a balance and paying the minimum. It will kill you over time.

By: Miranda

Miranda — Tue, 16 Jun 2009 13:23:35 +0000

This is a great list. I wish I had followed some of these rules when I was a student. Unfortunately, I learned most of the credit card rules the hard way — by not following them and the reaping the horrible, horrible consequences.